The shares of New Gold Inc. (NYSE:NGD) and Iron Mountain Incorporated (NYSE:IRM) were among the active stocks of the last trading sessions. New Gold Inc. (NYSE:NGD) soared to 5.99% closing at the price of $0.82 whereas the shares of Iron Mountain Incorporated (NYSE:IRM) declined -2.93% with the decrease of -0.95 points closing at the price of $31.5. New Gold Inc. has currently decrease -65.93% in its stock over the period of 6-months while its rival Iron Mountain Incorporated subtracted -5.55% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of New Gold Inc. (NYSE:NGD) is -3% while the ROI of Iron Mountain Incorporated (NYSE:IRM) is 5.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NGD’s EBITDA Margin is 4.36 whereas IRM’s is 12.73.
Both the profitability ratios suggest that Iron Mountain Incorporated (NYSE:IRM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
New Gold Inc. (NYSE:NGD) reported $0.01/share EPS for the previous quarter where analysts were predicting an EPS to be $0.01/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Iron Mountain Incorporated (NYSE:IRM) reported EPS of $0.3/share in the last quarter. The analysts projected EPS of $0.25/share depicting a Surprise of 20 Percent.
Taking a look at Earnings per Share, Iron Mountain Incorporated tends to be beating the analyst estimates more than New Gold Inc.. so IRM is more profitable than NGD.
Technical Analysis of New Gold Inc. & Iron Mountain Incorporated
Moving average convergence divergence (MACD) shows that New Gold Inc. (NYSE:NGD) is on a PRICE RELATIVITY trend While Iron Mountain Incorporated (NYSE:IRM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the New Gold Inc. was in BEARISH territory and Iron Mountain Incorporated was in BEARISH territory.
NGD’s current statistics gauge that the stock candle is NEUTRAL with MEDIUM volatility. While IRM’s candle is BEARISH with HIGH.
EPS Growth Rate: NGD’s 9.61% versus IRM’s 32%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of New Gold Inc. (NYSE:NGD) is predicted at 9.61% while Iron Mountain Incorporated (NYSE:IRM) stands at 32%. These numbers suggest that IRM is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of NGD stands at 3 while IRM is at 1 whereas the debt ratio of the prior is 0.53 while the debt ratio of the later is 3.98.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.7 for NGD and 2.4 for IRM which means NGD has Hold rating whereas IRM has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for NGD is $3.81 which is 78.48% of its current price while IRM has price target of 39.11 which is 19.46% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
NGD currently has price to earning P/E ratio of 0 whereas IRM has 47.95 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 25.57.
The price to Book P/B for NGD is 0.26, Price to Sale is at 0.69 and for IRM these ratios stand at 4.38 and 2.24.